{"id":21875,"date":"2016-10-01T16:12:47","date_gmt":"2016-10-01T21:12:47","guid":{"rendered":"http:\/\/olduvai.ca\/?p=21875"},"modified":"2016-10-01T16:12:47","modified_gmt":"2016-10-01T21:12:47","slug":"three-reasons-why-the-banking-system-is-rigged-against-you","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=21875","title":{"rendered":"Three reasons why the banking system is rigged against you"},"content":{"rendered":"

Three reasons why the banking system is rigged against you<\/a><\/h3>\n
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If there were ever any doubt about how completely RIGGED the banking system is against depositors, allow me to introduce the following:<\/p>\n

Exhibit A: Governments are working to make banks LESS safe<\/p>\n

Yesterday an unelected bureaucrat that no one has ever heard of\u00a0made a stunning announcement<\/a>\u00a0that has sweeping implications for anyone with a bank account.<\/p>\n

Dombrovskis is Europe\u2019s top financial services official, so he controls bank regulations in the European Union.<\/p>\n

He issued a stern warning to global bank regulators yesterday that he is prepared to reject any further plans they might have to tighten bank capital requirements.<\/p>\n

This might sound rather dry, but it\u2019s incredibly important.<\/p>\n

\u201cBank capital\u201d is the most critical component of any bank balance sheet.<\/p>\n

Capital is like a bank\u2019s rainy day fund; when things start to go bad, a bank\u2019s capital provides a margin of safety to ensure that their depositors\u2019 funds are safe.<\/p>\n

Strong banks have ample capital and are able to withstand crises.<\/p>\n

Weak banks with low levels of capital collapse. And that\u2019s precisely what happened in 2008.<\/p>\n

Most banks across the west had very low levels of capital. They had spent years making appallingly stupid \u2018no money down\u2019 loans with 0% teaser interest rates to borrowers with pitiful credit.<\/p>\n

When that bubble burst, the banks lost billions of dollars. And it turned out that most of the banks at the time had razor thin levels of capital.<\/p>\n

If you\u2019re wondering why, the answer is quite simple: the less capital a bank maintains, the more money it can invest\u2026 so poorly capitalized banks tend to make more money.<\/p>\n

Lehman Brothers was quite profitable.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Three reasons why the banking system is rigged against you If there were ever any doubt about how completely RIGGED the banking system is against depositors, allow me to introduce the following: Exhibit A: Governments are working to make banks LESS safe Yesterday an unelected bureaucrat that no one has ever heard of\u00a0made a stunning […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[8263,53,2229,14407,281,5415,536,7312,7313],"class_list":["post-21875","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-capital","tag-bank-deposits","tag-banking-system","tag-dombrovskis","tag-europe","tag-lehman-brothers","tag-money","tag-simon-black","tag-sovereign-man"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21875","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=21875"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21875\/revisions"}],"predecessor-version":[{"id":21876,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21875\/revisions\/21876"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=21875"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=21875"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=21875"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}